Kaesong closure concerns
A recent visitor to the Kaesong Industrial Complex was assured that factories were rolling and it was business as usual at the industrial park that has been at the heart of chilled inter-Korean relations. “Even foreign buyers were impressed,” Moon Chang-sup, head of the association of businesses engaged in industrial activities on North Korean soil, told incredulous journalists on Friday, returning from inter-Korean talks on matters regarding the complex. It’s a relief, however, to hear that production lines at the complex are still unaffected by the political strife.
It is a miracle that the two Koreas agreed on mutually beneficial cooperation in establishing the Kaesong Industrial Complex. That’s why Seoul tolerated the unreasonable and overbearing demands and changes Pyongyang has been making regarding the factory site since December. Statistics show that output was cut by 20 to 60 percent in factory lines in the complex after the North restricted entry and exit from the industrial site to three times a day from the cap of 12 since late last year.
But the North appears to care little about the production losses and we now may have to fear the possible closure of the complex. If the complex goes down, so will the South’s public capital of 360 billion won and private funds of 370 billion won. Seoul officials will have to do whatever they can to convince their North Korean counterparts of the economic sense of maintaining the complex. We cannot be pushed around all the time. During the meeting in Kaesong last week, the North neither asked nor bothered to consult, but demanded that the South raise wages and land use payments.
North Korean officials kept silent about the Hyundai Asan employee detained in the North since last month for allegedly criticizing the Pyongyang regime. They instead aggressively bargained the future of the industrial complex with the South’s plan to join the Proliferation Security Initiative. Seoul is mulling to seek full membership of the United States-led campaign to deter trafficking in weapons of mass destruction as South Korea’s counteraction to the North’s persistent missile development. Pyongyang has recently threatened to resume its nuclear program after the United Nations condemned its rocket launch.
As regards the complex, Seoul needs to prepare for the worst. If the Kaesong complex unavoidably has to close down, the government needs to subsidize and help lessen the losses of South Korean businesses. Negotiating business terms is understandable, but linking the complex with the safe release of a Korean detainee or a military issue like PSI participation cannot be accepted. The North has a lot more to lose if it gives up an inter-Korean business venture.